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Life insurance for kids? The simple answer is no, you don’t need life insurance for your kids. Surprised? We get it. The thought of something happening to your children is enough to stir up fear and anxiety in every parent’s heart.

But hear us out—those emotions are exactly what life insurance marketers target when they try to sell you life insurance for your kids. It’s all based on a bunch of myths! We’re going to explore (and debunk) those myths about life insurance for kids and talk about what you should do instead.

What Is Life Insurance for Children?

Life insurance for children is an insurance policy that pays a payout, usually to the parents, if their child passes away. If you have life insurance on yourself (and we really hope you do), it won’t surprise you to know that some of the features you’re already familiar with also apply to life insurance for kids:

• You pay monthly, quarterly or annual premiums (that last one can save you money).
• There’s a beneficiary (with children’s insurance, it’s typically the child’s parent, who is also the policy owner).
• You would need to make a claim with the life insurance company to receive the death benefit.

But that’s pretty much where the similarities end. There’s one huge difference between life insurance for kids and the life insurance you buy for yourself or your spouse: In most cases, a children’s policy cannot be term life—which is the only kind of life insurance anybody should get! The fact that most policies for kids are whole life (what a crock) tells you a lot about why this concept sucks.

Why Kids’ Life Insurance Is Just Hype

Here’s the deal: The only job of life insurance is to replace the income of the person who has died so their family will be financially supported after they’re gone. And who ever heard of a child with an income? (Unless you count child actors living out their parents’ unrealized dreams of stardom? But we digress.)

Even if you have a budding entrepreneur for a son or daughter, it’s not likely you’re depending on their income for your own livelihood. So where is this concept of kid’s life insurance even coming from?

We’ll tell you. It’s marketing hype aimed at selling you something neither you nor your child actually need. The problem is, kid’s life insurance takes a great idea like life insurance—which is essential protection—and combines it with something totally unrelated and nonexistent, like kids’ incomes.

Why People Buy Life Insurance for Kids

Like we pointed out above, advertisers do a great job manipulating your heartfelt love for your kids. They make kids’ life insurance sound like the best thing since the 7 Baby Steps—and we love the Baby Steps! Here are some of the myths that keep people buying life insurance for their kids:

Myth #1: It helps me save for my child’s education.

You’ve probably seen this as a feature of whole life insurance for kids. The idea is that the monthly premium will build up savings for college. Sounds amazing, right? Not so fast, because there are some issues here.

• The fees will eat away at your return.
• The return? It isn’t great—about as much as a traditional CD (certificate of deposit) you’d get at a bank.
• You’ll also have to pay fees to get your money when it’s time to pay tuition. In what world is this a good idea? If you said clown world, you’re right!

Myth #2: It guarantees my child can get more life insurance later.

Some parents and grandparents want to make sure their kids can get good life insurance even if the kids develop a medical problem early on.

Compare Term Life Insurance Quotes 

The truth is, most people in their 20s and 30s have no problem getting a good term life insurance policy, so this myth fails as a reason to buy kid’s life insurance.

Say you did decide to buy life insurance for your kids, and later, they wanted to carry their policy into adulthood. In that case, you’d both be disappointed to find that there’s a limit to how much you can add to a child life insurance policy. In many cases, that amount is too small to provide for their family long term.

Myth #3: It covers funeral expenses and other costs.

Yes, life insurance would cover funeral expenses. But the likelihood of actually needing it is so slim that you’re better off putting the monthly premium payments into a savings account. Then you have control of that money and can use it for other expenses, like your child’s wisdom teeth removal. That type of expense is much more likely to happen. (By the way, have you seen the viral and hilarious wisdom teeth surgery wakeup footage on TikTok? The views are insane! Poor kids.)

Alternatives to Children’s Life Insurance

Without children’s life insurance, how do you pay for burial expenses if the unthinkable happens? We’ve got an easy fix. Instead of paying insurance premiums for a policy you don’t need, put that money in an emergency fund. By stashing away three to six months of living expenses, you can easily cover the cost of a funeral—or any other emergency that might pop up along the way.

If you don’t have that money saved yet, no sweat. You can get a rider for your children on your term life policy (or your spouse’s). A rider is an add-on to a basic policy, like adding bells and whistles to your car.

This kind of rider is pretty cheap—around $50–60 a year—and it covers all your kids, no matter how many you have, until they’re no longer members of your household.

Do the Right Thing

If you’re in the market for new life insurance for you or your spouse, we recommend RamseyTrusted partner Zander Insurance to help you make the right decisions. They’ll make sure your policy will replace your income and put your kids in the best situation possible if tragedy happens and one of you passes away.

Protect the little people in your life today!